Canadian Salary Increase Projections for 2026 Revealed
As the cost of living continues to rise in Canada, workers are keen to learn about the anticipated salary increases for 2026. Normandin Beaudry, an actuarial consulting firm, released insights from its Salary Increase Pulse Survey, which included nearly 400 Canadian companies. The survey was conducted in the last quarter of 2025.
Projected Salary Increase for 2026
The report reveals that Canadian organizations are expected to slightly reduce their salary increase budgets. The average salary increase for 2026 is projected to be 3%, a decrease of 0.1% from summer 2025 figures. This trend reflects a consistent decline that began in 2023.
Regional Salary Increase Breakdown
Salary increases vary by province, with Quebec projected to have the highest increase at 3.5%. Other provinces follow closely:
- Ontario: 3.3%
- Alberta: 3.3%
- British Columbia: 3.2%
Factors Influencing Salary Increases
Darcy Clark, senior principal of compensation at Normandin Beaudry, noted that ongoing economic and trade uncertainties are leading organizations to take a cautious approach to salary budgets. Furthermore, there is a growing expectation for transparency in how companies communicate their employee benefits.
Budget Adjustments Among Organizations
The survey highlights that 74% of organizations do not plan to alter their salary increase budgets initially set last summer. Among the 26% looking to adjust their budgets:
- Over half will reduce their budgets.
- The remainder will increase their budgets.
Additional Budget Allocations
In addition to traditional salary budgets, 42% of respondents allocated an average of 0.8% of payroll for extra budget funds. This demonstrates a focus on enhancing employee rewards strategies for 2026, including:
- Employee engagement: 58% of respondents
- Compliance with pay equity and transparency: 47%
- Improved employee communication: 42%
Outlook for Employee Incentives
Almost half of the organizations (47%) anticipate that their annual incentive plans will meet or exceed targets. Additionally, 35% of companies intend to increase their workforce in 2026. The comprehensive insights from the Salary Increase Pulse Survey by Normandin Beaudry provide a valuable outlook for employees navigating salary expectations in the coming year.
